PM calls out big banks over rates cuts

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Prime Minister Malcolm Turnbull has called on the big four banks to pass on the full 0.25 per cent interest rate cut to their consumers, saying that the banks’ chief executives should explain the reasoning behind withholding the proportion of the cut.

“They should pass it all on,” Turnbull said. “They should do that, and if they are not prepared to do it, as appears to be the case, then their chief executives should explain very clearly to the Australian people and their customers why they have not done so.”

“They operate with a very substantial social licence and they owe it to the Australian people and their customers to explain fully and comprehensively why they have not passed on the full rate cut and they must do so,” he added.

Opposition leader Bill Shorten also echoed Turnbull’s sentiment while renewing the calls for the establishment of a royal commission in the sector.

“The decision by the banks to hold back the rate cut from hardworking Australians does nothing to help their credibility,” Shorten said.

However, Australian Bankers Association CEO Steve Munchenberg dismissed the calls for a royal commission.

“Two-thirds of bank funding comes from deposits, and the cost of deposits has been going up which is good news for savers, and people with a mortgage are enjoying record low mortgage rates,” Munchenberg said.

Following the RBA rate cut, Commonwealth Bank trimmed its rates by 13 basis points. Westpac, ANZ, and National Australian Bank followed suit with rate cuts at 14, 12, and 10 basis points, respectively.

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